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76% Of Energy Utilities Breached In Past Year

Despite the high risks, energy company managers don't understand the importance of IT security, according to 71% of security pros surveyed by Ponemon Institute.

Three-quarters of energy companies and utilities have experienced at least one data breach in the past 12 months, resulting in average clean-up costs of $156,000 per breach. Furthermore, 69% of organizations think that another data breach is very likely to occur within the next year.

Those findings come from a survey of 291 IT security practitioners in energy companies and utilities, conducted by Ponemon Institute and sponsored by security vendor Q1 Labs.

Numerous studies have pointed to a continuing increase in online attacks against so-called critical infrastructure providers -- including oil, gas, and electricity suppliers --often driven by political motivations. Furthermore, legislators and government agencies have been increasingly concerned that the nation's critical infrastructure -- which is almost completely controlled by private industry -- is at risk of attacks, not least by terrorists or unfriendly nation states.

But according to the Ponemon study, 71% of people surveyed said that "the management team in their organization does not understand or appreciate the value of IT security." Perhaps as a result, only 39% of organizations are actively watching for advanced persistent threats. Furthermore, 67% aren't using "state of the art" technology to stop attacks against SCADA systems, and 41% said their approach to SCADA security wasn't at all proactive.

Executive-level apathy or misunderstanding over information security is surprising, given the high profile of the Stuxnet attack, which demonstrated that control systems -- previously treated by utilities as if they were immune to online attacks -- could indeed be exploited via the Internet to cause physical damage to sensitive environments, such as nuclear-refinement facilities.

That said, the Ponemon study found that the number-one threat for energy utilities isn't outside attackers, but insiders. In particular, 43% of utilities said that "negligent or malicious insiders" caused the highest number of data breaches. "A lack of leadership and absolute control over the security program could be contributing to this threat," according to Ponemon's report. Notably, only 18% of utilities said that a security leader had overall responsibility for information security, while in 29% of organizations, no one person had overall responsibility.

Energy organizations also have a hard time identifying malicious behavior in a timely manner. "One of the scariest points that jumped out at me is that it takes, on average, 22 days to detect insiders making unauthorized changes, showing just how vulnerable organizations are today," said Larry Ponemon, founder and chairman of the Ponemon Institute, in a statement.

Many energy utilities also remain unprepared -- at least from a security standpoint -- for the switch to smart grids and smart meters, which market watchers estimate will be used by 440 million households and businesses by 2015. According to the Ponemon report, "a mere 21% of global energy and utilities organizations feel that their existing controls are able to protect against exploits and attacks through smart grid and smart meter-connected systems."

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